Need help with creating proper decals

Alright, so I have been trying for some time now. But it seems that most programs except (and maybe Gimp) doesnt like transparency in VTF files. They open up and look extremely weird. I even tried opening a normal PNG with transparency in it with VTFlib, but still it doesnt seem like it have any transparency in it.

Photoshop looks like this:[/T]

It’s really starting to piss me off a lot, as I have used a long time on trying to make it work.

Here’s a screen of VTFlib:

You need to switch to the “Channels” tab in Photoshop and create a new one for an Alpha channel. Not just normal PNG transparency or whatnot.

Tutorial for TF2 transparency sprays but it applies the same for materials: